Report: U.S. Falling Behind Rest Of World In Broadband Adoption

U.S. slips to thirteenth place worldwide and digital divide widens because of government policies, concludes study.

October 28, 2004

2 Min Read
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The United States is falling behind the world in broadband Internet adoption and the digital divide is growing wider due largely to Bush Administration policies, concludes a new report by the Consumers Federation of America and the Consumers Union.

In "Expanding the Digital Divide & Falling Behind in Broadband: Why a Telecommunications Policy of Neglect is Not Benign," Consumer Federation research director Mark Cooper argues that the current administration's laissez-faire approach has done little to fulfill its promise of providing affordable broadband access through competition. Indeed, Cooper notes that "not only has the current approach neglected universal service policy, but it would undermine the ability to promote universal service under the Communications Act."

The numbers are startling: Since 2001, when President Bush appointed Michael K. Powell chairman of the FCC, the United States has dropped to thirteenth from third overall in broadband adoption worldwide, according to the study. Rates paid for broadband service in the U.S. far from dropping, remain high; Americans pay between ten and twenty times more for access than their counterparts in Japan and Korea, says the report. Not surprisingly, Internet penetration in the United States has stalled at about 60 percent.

According to the report, the high price of broadband has had the most impact on low and middle income households, helping to widen the digital divide. While half of all households with incomes over $75,000 have broadband access, half of all households with incomes of less than $30,000 have no Internet access at all. Moreover, the FCC's failure to define advanced telecommunications services as telecommunications services has made it impossible for it to raise universal services funds from broadband services, concludes the report.

Cooper writes: "As upper income households migrate to advanced telecommunications networks, which escape public interest obligations, the pool of resources available to support the narrowband network shrinks and the burden of maintaining the dial up network will increase dramatically. Prices will rise and the quality of service will decline."According to Consumers Union senior public policy director Gene Kimmelman, the situation will only worsen as long as Washington ignores the digital divide and neglects universal access. "Failure to make high-speed and voice over Internet services responsible for maintaining affordable access to basic phone services will result in higher phone bills for low and moderate income households," he said in a statement. "As more and more upper income households migrate to advanced telecommunications networks, many local telephone companies are attempting to raise basic rates by $4 per month."

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